11 Sep How much money can you make with day trading?
How much money can you make with day trading?
If you have $25,000 to meet the minimum threshold to be a pattern day trader, you can use 4:1 margin leverage to buy stocks for up to $100,000 during the day. With that amount of money, it is eminently feasible to make anywhere from $100 to $2,000 on average per day. Of course, you could also loose that amount of money and as you have heard, people who don’t learn how a solid day trading system first, might actually lose more than they gain. So it really depends on your skill level, risk tolerance and a little bit of luck of how much you make or lose on any given day.
Let me give you a few examples: Check the chart of any stock. Chances are that on a typical day, it moves anywhere from 0.25% to 1% in one direction or another. Depending on how much money you invest in that stock, that 0.25% to 1% can translate into several hundred to several thousand dollars. For example, a stock like Apple (AAPL) costs ~ $100. If you buy $50,000 worth of that stock (= 500 shares), and the stock’s price moves by a mere 10 cents (= 0.1%) over the course of a few minutes, you would make a $50 (before trading commissions). If it moved a full $1, you could pocket some $500. If you study the chart of Apple on any given day, you would notice that Apple does these types actually quite frequently. If you invested $100,000 in a stock like AQXP on August x, 2015 at $2 when it opened in the morning, and held on to it until the end of the day, you could have ended up with $600,000. But those are rare exceptions that even the best traders in the world don’t catch. Day traders typically take profits as soon as the trade reverses in the opposite direction and might not actually re-enter the same stock. So a good day trader might have only captured a few thousands dollars of that move, rather than the full rally. On any given day, it’s more realistic to capture anywhere from 10 to 50 cents of your average stock’s move. If you invested 1,000 shares, you would end up with $100 to $500 in profits – assuming you had a winning trade. But you also have to account for losses. They are inevitable and are just part of the ‘game’. The trick is to lose less than you gain, and that’s where day trading systems and strategies come into play.